Continuing significant lumber sales volumes and ongoing constraints with supply, particularly in transportation, served to drive most construction framing dimension softwood lumber prices higher in the first week of 2022, according to Madison’s Lumber Reporter. It seemed like building activity has not taken a breather for the past year and a half, as housing starts in the US and Canada keep driving up. Homes sales as well, indicating ongoing future demand for lumber – certainly for the next several months at a minimum.
Momentum from strong demand at the end of 2021 pushed prices higher, so in the week ending January 7, 2022 the price of benchmark lumber item Western S-P-F 2x4 #2&Btr KD (RL) continued rising; up by +$150 or +16% to US$1,100 mfbm, from $950 the previous week, said forest products industry price guide newsletter Madison’s Lumber Reporter. That last week’s price is up by +$297, or +37%, from one month ago when it was $803.
Supply chain issues continued to dominate conversations across the lumber market. If it wasn’t customers complaining about delayed shipments from weeks ago it was shippers complaining about lack of drivers and equipment.
Demand was quiet to start 2022 as most Western S-P-F buyers in the US had purchased the bulk of their January-needs by the end of December. Players noted that sawmills were slow to return from the holiday break, making it harder to source material when needed. Immense snowfalls in recent weeks across the Western United States didn’t help logistical issues. While producers were frustrated with the problems in log procurement and shipping, they remained in strong positions. Prices were up, and order files were into late-January and pushing.
Canadian Western S-P-F customers carried over their cautious buying strategies from late-2021 into early-2022. Demand was muted, but availability from the sawmills was so scanty that necessity-buys were more than sufficient to gobble up overall supply. Adding to production-affecting holiday shutdowns was a spate of severe winter weather that lashed the Pacific Northwest, causing all sorts of issues for harvesting, hauling, and transportation. On top of that, reaction to the spread of Omicron has created personnel shortages up and down the supply chain. Mills remained in strong positions pricewise and pushed their order files into mid- or late-January.
Compared to the same week last year, when it was US$944 mfbm, for the week ending January 7, 2022 the price of Western S-P-F 2x4 #2&Btr KD (RL) was up by +$156 or +37%.
Compared to two years’ ago when it was $402, that week’s price was up by +$698, or +174%.